International Antitrust Law & Policy: Fordham Corporate Law 2005 - Hardcover
International Antitrust Law & Policy: Fordham Corporate Law 2005 - PDF
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Chapter 1
BRAZILIAN COMPETITION POLICY SYSTEM
Elizabeth Farina†
Key issues: benefits of antitrust enforcement, benefits to justify the
existence of antitrust authority, role of judicial review, complaints versus ex
officio, what cases to investigate, role of antitrust authorities in regulated
industries, competition advocacy in regulated sectors, independence of
government, independence versus participation in competition policy
decisions, legitimacy of competition authorities to intervene in public policy
debates, obstacles to competition due to restrictive government regulations,
the best model for competition agencies.
I. INTRODUCTION
The Brazilian legislation, since the 1934 Constitution, has provided in
its article 115 for the prohibition of unfair competition. In the 1946
Constitution, in its article 148, prohibition of abuse of economic power was
introduced. As a consequence of this Constitutional provision, the Law
4.137 created the Brazilian Council for Economic Defense (CADE) in 1962.
This provision was strengthened by the 1988 Constitution, which disposes
in its article 170 that free competition is one of the economic order pillars.
Notwithstanding, only after 1994, effective competition policy enforcement
has been possible in Brazil, overcoming two other ineffective Laws
(4137/62 and 8158/91).
Brazil has a long history of state intervention in the economy. The
scenario of price control, trade barriers, high inflation rates and
government enterprises, hindered competition enforcement in the past. In
the early 1990’s, Brazil went through a trade and price liberalization and
deregulation process. However, even with all the changes, firms still had
the culture of negotiating prices with the government, which had been the
procedure for more than 30 years. In 1994, the Brazilian Competition Law
(Law 8.884) was enacted, which transformed CADE into an independent
agency, and gave a strong emphasis to merger control, fighting cartels and
competition advocacy. All these changes significantly enhanced the
Brazilian Competition System’s effectiveness, establishing the year of 1994
as a turning point. After eleven years of competition policies,
strengthening the “competition culture” and, as a consequence, increasing
the compliance level with competition law provisions are still targets.
